Nobility and Noability: or writing the 1%
Frances A. Chiu
[A paper presented at the Left Forum at Pace University, 18 March,
2012. Frances Chiu, Ph.D. is an assistant professor in the
Humanities and Social Sciences departments, The New School for
Public Engagement, New York)
It is a truth universally acknowledged that Paine regarded the New
World as a much more enlightened one than the Old. In Part 2 of
Rights of Man, he declared that things were working out well
for the new republic in spite of the diverse national origins and
religions, a nation where government operates "on the
principles of society and the rights of man, every difficulty
retires, and all the parts are brought into cordial unison." It
was a nation where "the poor are not oppressed, the rich are
not privileged. Industry is not mortified by the splendid
extravagance of a court rioting at its expense. Their taxes are few,
because their government is just: and as there is nothing to render
them wretched, there is nothing to engender riots and tumults."
Such was the America of 1792 in Paine's view -- and what a
difference from Old World England, bogged down by a greedy
hereditary government busily "thrusting itself into every
corner and crevice of industry, and grasping the spoil of the
multitude." At first glance, it would appear that "all was
happiness" in such countries as England, but Paine was careful
to add that "there lies hidden from the eye of common
observation, a mass of wretchedness that has scarcely any other
chance, than to expire in poverty or infamy." After all, it was
a nation where wealthy aristocrats and their relatives shifted the
burden of taxation to the poor and middling orders. A nation where
it was not unusual for laborers to work until the age of 80,
subsisting on our equivalent of $60 a day. A nation with no
bargaining rights for workers. A nation where riots over food
erupted while radical movements for constitutional reform spread
across the land. And, not least, as Paine would discover for himself
after publishing Part 2 of Rights of Man, a nation that
suppressed dissent while pretending to champion free
speech--especially of the "leveling" kind. This was
England in 1792 -- a nation that was widely purported to be the most
democratic European nation, where a mere baronet could quickly
ascend the ranks to become a duke in less than 20 years.
Let's now fast forward 220 years from the publication of Rights
of Man, Parts and 1 and 2. Is America still a nation where the
poor are not oppressed and the rich are not privileged?
Unfortunately, I think most of us know the answer to that
question--because the truth is that at this point in our history, we
are farther away from Paine's America, and closer to his England. If
anything, it could be argued that current socio-economic and
political trends are pushing America back across the Atlantic to a
time when men and women were governed by bigwigs, literally and
figuratively speaking. Or perhaps to the early 20th at latest: which
just might explain our current obsessions with the umpteenth
adaptation of Pride and Prejudice -- great as it is -- or
Downton Abbey. (Or more appropriately, Uptown Abbey -- and,
really, any costume drama that revolves around stately houses,
well-spoken masters, and deferential servants.) What I want to do in
my presentation is explore a few uncanny affinities between 18th-
and 20th-century patterns of power, showing how Paine's analysis of
his world remains as relevant as ever, if not more so, in regard to
our changing wealth distribution and political power: both of which
have dangerous repercussions on other facets of our lives. Although
we have neither a monarch nor any form of hereditary government, our
declining social mobility and political power--in stark contrast to
that of the one-percenters--show that we have not learned much from
Paine.
Let's begin with a preliminary comparison of wealth distribution in
18th century England and our own: Back then, the aristocracy and
gentry made up nearly 1% of the population but their
incomes--derived largely from property rather than financial assets
today, comprised nearly 25% of the national income: which,
incidentally, fall in almost exactly in the same proportions as they
were in 1929 and in 2007 -- that is, right before the Great
Depression and Great Recession. Even more interesting is how the
incomes seem to correlate with ours today. The wealthiest
aristocrats, the dukes and earls--the top tenth of the 1% then --
enjoyed annual sums of 10,000 -50,000 pounds a year--which
translates roughly to 20 million to a 100 million dollars today.
Further down in the 1% was the wealthier segment of the gentry whose
income ranged from 1000 to 3000 pounds, equivalent to somewhere
between 1.6 and 4.8 million dollars a year. At the next rung down
were those whose work entailed some degree of training or education,
including teachers, clergy, attorneys, bankers, merchants -- with
incomes ranging from 40 to 400 pounds a year -- equivalent to
$60,000 to $600,000: these men comprised 40% of the population.
Finally, nearly 50% were poor, with the bottom 20% receiving some
sort of parish assistance: generally, the poor made no more than 20
pounds a year, equivalent to 24,000 dollars a year.
By the end of the 18th century, the haves gained even more as
aristocrats outearned their predecessors from the previous century
while personal and material losses for everyone else mounted.
Aristocrats not only doubled their income by raising rents and
acquiring more land when they accelerated the enclosure of the
commons, but also managed to shift much of the burden of taxation
from land to articles of consumption. Indeed, national income
derived from the land tax was nearly halved from 33% at the
beginning of the century to 17% at the end. The story was different,
however, for those at the lower end of middling who lost whatever
independence they once possessed and suffered declining wages,
especially by 1813 with the repeal of the apprenticeship laws.
Laborers would also lose benefits in the form of meals at their
employers' tables -- not unlike the way many in the middle classes
today have lost employer provided health insurance and pensions.
Let's now shift to the present. Today, we find a significant rise
in the incomes of the wealthy today on top of a sharply reduced rate
of taxation. The ratio of CEOs and upper management salaries to
those of the average worker--343x, to be exact -- is far more than
in any developed nation, as Japanese, German, French, and British
CEOs make 11, 12, 15 and 22x respectively. Moreover, even though tax
rates on the wealthy in America have been all over the place during
the last century, it is striking that the highest rates, enacted
during Hoover's and Roosevelt's terms, remained intact for at least
3 decades before becoming steadily reduced to 39% by the end of the
20th century -- and to 36.5% afterwards. It's equally striking too
that just as in the 18th century, nearly one out of two people in
2011 are either low income or poor -- and that the poverty rate
today is the highest it's been since 1993, at 15.3%. Overall, the US
enjoys less social mobility and more child poverty than Canada,
France, and yes Britain, such that one is more likely to remain in
his/her parents' social rank: so much for the Horatio Alger myth in
America, the new "Old World."
This is where Paine comes in. Although dukes, earls and other lords
had always been vaguely distrusted by the 99% -- we see this in much
of the literature of the time, from Defoe to Fielding and Richardson
-- it was Paine who clearly articulated the problems posed by the
landed elites. In response to Edmund Burke, who famously defended
the aristocratic retention of political power while asserting that
there was nothing wrong with pride of birth -- such men were better
educated than the "swinish multitude" and were more moral,
Paine made four important points.
First off, these high and mighty men harbored a fundamentally
flawed sense of "distributive justice." How could they not
when the laws of primogeniture decreed that the eldest son was to
inherit the title and estate? As Paine put it, heirs "begin
life by trampling on all their younger brothers and sisters, and
relations of every kind, and are taught and educated so to do."
How could one exert any sense of justice or honour in a house of
legislation when he absorbs "in his own person the inheritance
of a whole family of children or doles out to them some pitiful
portion with the insolence of a gift?" Secondly, a body of men "holding
themselves accountable to nobody, ought not to be trusted by
anybody." Thirdly, why did "the landed interest require
more money than other interest in the state" and "what
right has it to a distinct and separate representation from the
general interest of a nation?" For instance, why wasn't there a
comparable house of brewers or bakers? Paine noted that "the
only use to be made of this power, and which it has always made, is
to ward off taxes from itself, and throw the burthen upon such
articles of consumption by which itself would be least affected"
whether it be soap, paper, or candles. Fourthly, circumstances were
such that the aristocracy didn't even need to pay taxes on alcohol
since they often brewed their own beer. In fact, sometimes their
privately held natural resources and commodities allowed them to
profit at the expense of the people. The Duke of Richmond, as Paine
pointed out, was able to supplement his income through taxes on coal
from his mine: "it is horrid that any man, more especially at
the price of coals now are, should live on the distresses of a
community; and any government permitting such an abuse, deserves to
be dismissed."
Let's look a little more closely at the present ramifications of
these problems which Paine identified: a sense of privilege, lack of
accountability, greed, and collusion -- all of which can be said to
overturn classical views of the aristocracy as a people naturally
fit to legislate. Many of these issues remain intact more than two
centuries later, even if the terms have changed. We may not have a
political aristocracy -- if we exclude the Kennedys, Bushes, and
Clintons. But what we find increasingly is a return to the classical
notion from Machiavelli through Adam Smith and Edmund Burke that the
elite classes were the most fit to govern: one based on the
assumption that their wealth naturally insured them against greed,
inclining them to be impartial and thereby have the nation's best
interests at heart. What a crock said Paine and other contemporary
radicals such as Mary Wollstonecraft and her future husband William
Godwin. The wealthy were not only as avaricious as anyone else --
but were provided with legal opportunities to satisfy their desires.
Now just how did this work? Back then, aristocrats lobbied for
their favored candidates for members of parliament; and the few who
were enfranchised usually felt compelled to support them -- some out
of veneration for the opinion of the great duke, others for fear of
repercussions if they didn't heed his Excellency's most august
advice. And now, as then, there were few scruples about spending
vast sums on elections; in his popular Sermons to Asses of
1768, James Murray was one of the first to complain openly of
candidates and their supporters spending upwards of 45,000 pounds --
the equivalent of 1.2 billion dollars: why couldn't this be put to
more practical use, like feeding vast numbers of the poor?
Today, these relationships are not as obvious: we don't get
personal visits from "the Donald" or the Koch brothers
telling us to vote for "their" man. But this influence
does persist in more covert ways as the wealthy have increasingly
sought to buy their will, whether through networking with the
politician, establishing think tanks like the Heritage Foundation
and Cato institutes for the wonks, faux populist platforms like the
Tea Party, or creating super-PACs. If anything, relationships
between politicians and executives and their sharing of networks
mirror the cozy relationships between 18th-century peers,
relations, and their candidates of choice. Looming over all of this
is the Supreme Court's sustained refusal from 2008 to overturn
restrictions on spending limits for campaign contributions,
especially with its decisions on Citizens United which posit
corporations as individuals: and from which the Republican party has
been garnering great strength. And even with these advantages,
one-percenters like Ken Griffin, a founder of the Citadel hedge fund
and billionaire supporter of Mitt Romney, continue to gripe that the
wealth have insufficient influence on politics.
As such, it's not surprising that now, as then, we have policies
dictated by the wealthy to favor the wealthy. It's worth pointing
out that this problem is far from being a partisan matter--even if
it's one most closely associated with the GOP. Let's not forget that
Senate Democrats and Republicans have collaborated to preserve the
loophole enabling hedge fund and equity managers to treat their fees
as longterm capital gains rather than ordinary income: not to do so
would most likely shrink campaign contributions. Let's not forget
either that both parties agreed on the no-strings-attached bailout
and our currently watered-down version of say-on-executive-pay:
after all, in 2010, the Obama administration would limit proxy
access in governance issues to those with at least a 5% stake in any
given publicly traded company -- a measure that is met by few
investors. Significantly too, Obama and the congressional Democrats
have agreed that the exemption for the inheritance tax should remain
at 10 million -- a policy that runs counter to Paine's idea in Rights
of Man and Agrarian Justice that "overgrown estates"
should be taxed at much higher rates since they are clearly
luxuries. Whether our politicians are choosing to do such to protect
their own family fortunes or those of their donors is immaterial --
what matters is the fact that they are legislating for the welfare
of the wealthiest. Finally, much the same can be said for our
politicians' near complicit silence on the artificially high prices
of oil triggered by Wall Street's betting at present [spring 2012].
That's why Republicans blame Obama while Obama conveniently urges
Americans to buy smaller cars. It's time to ask as Paine does, "Is
it then, better that the lives of one hundred and forty thousand
aged persons be rendered comfortable, or that a million a year of
public money be expended on any one individual, and him often of the
most worthless or insignificant character? Let reason and justice,
let honour and humanity, let even hypocrisy ….and Mr. Burke,
let George, let Louis, Leopold Frederick Catherine or Tippoo Saib
answer the question." This is a question that we might equally
pose to Jamie Dimon, John Thain, Lloyd Blankfein, and all TARP
recipients as well. As such, Paine's words on the broken government
in 18th century England also come in quite handy:
Everything in the English government appears to me
the reverse of what it ought to be, and of what it is said to be.
The Parliament, imperfectly and capriciously elected as it is, is
nevertheless supposed to hold the national purse in trust for the
nation; but in the manner in which an English parliament is
constructed it is like a man being both mortgagor and mortgagee….Neither
the Ministerial party nor the Opposition will touch upon this
case. The national purse if the common hack which each mounts upon…..They
order these things better in France.
It didn't make any difference if Whigs or Tories were in
charge--any more than it does in the case of Democrats or
Republicans so long as they refuse to address the inequities between
the 1% and the 99%.
In all of this, the lives of ordinary Americans have been adversely
affected. Over the last 30 years, for instance, it has also become
more difficult for the middle and working classes to attend college
-- just like in the 18th century. Back then, the aristocracy sought
to keep the rest as ignorant as possible, -- or to put it in Paine's
words, "it is only "aristocratical and monarchical
government that requires ignorance." Nor is our 1% any
different as they clearly intend to keep the doors to higher
education shut, regardless of their lip service to meritocracy and
equal opportunity. With the precipitous decrease of grants,
especially Pell grants, students can barely afford rising
tuition--and indeed, our most elite private and public universities
are now predominantly attended by students from wealthy families
earning at least $210,000 annually.
Indeed, the fact that Ivies and other highly selective universities
privilege sons and daughters with primary alumni connections by as
much as 40% while setting aside places for the children of
politicians, entertainers, moguls reveals nothing short of a Burkean
ethos at work: one that is especially ironic in light of admissions
at British universities, Oxford and Cambridge included, where alumni
relationships and contributions receive scant weight. This culture
of coddling the elites is equally evident in the rampant grade
inflation where lax 18th-century standards at Oxbridge would appear
to be matched by lax standards today at the Ivies: for instance,
Harvard, where as many as 91% graduate with Latin honors and 45% of
students receive A's because few professors want to upset potential
donors and their parents. In all, one can't help but think of
Paine's remark that "This is the general character of the
aristocracy, or what are called Nobles or Nobility, or rather
No-ability, in all countries." And so the show goes on as our
bastions of higher learning continue to pretend that their student
base is comprised of the "best and the brightest" --
probably the very same kind of folks who produced the crisis of 2008
and are also responsible for corporatizing universities over the
last 30 years. After all, if a mediocre student receives an A,
doesn't he automatically have a right to expect a multi-million
dollar compensation, regardless of actual performance?
Not least, with the growing trend in the wealthiest residing in
gated communities and exclusive enclaves, while the poor and middle
classes bear a greater burden of increased property taxes in their
towns and federal assistance to states is rapidly shrinking, we are
closer to 18th century Britain than we realize.
So today, I think Paine would agree with Occupy Wall Street that
the 99% continues to be shortchanged. He would agree, as stated by
the declaration of OWS, that "no true democracy is attainable
when the process is determined by economic power" and that
corporations, "which place profit over people, self-interest
over justice, and oppression over equality, run our governments."
He would probably remind us too that "reason and discussion
will soon bring things right, however wrong they may begin. By such
a process no tumult is to be apprehended," because "the
poor in all countries are naturally both peaceable and grateful in
all reforms in which their interest and happiness is included. It is
only by neglecting and rejecting them that they become tumultuous."
With the approach of Spring in just two days and a revival of Occupy
Wall Street, let's remember Paine's concluding words in Rights
of Man:
It is now towards the middle of February. Were I
to take a turn into the country, the trees would present a
leafless, wintery appearance. As people are apt to pluck twigs as
they walk along, I perhaps might do the same, and by chance might
observe, that a single bud on that twig had begun to swell. I
should reason very unnaturally, or rather not reason at all, to
suppose this was the only bud in England which had this
appearance. Instead of deciding thus, I should instantly conclude,
that the same appearance was beginning, or about to begin, every
where; and though the vegetable sleep will continue longer on some
trees and plants than on others, and though some of them may not
blossom for two or three years, all will be in leaf in the summer,
except those which are rotten. What pace the political summer may
keep with the natural, no human foresight can determine. It is,
however, not difficult to perceive that the spring is begun.
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